Victoria's new China Strategy - Partnerships for Prosperity

8/18/2019 Victoria's new China Strategy - Partnerships for Prosperity

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Partnershipsfor prosperity

Victoria’s new China Strategy


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Contents

03 Premier’s Foreword

04 Foreword from the Minister for Small Business, Innovaon and Trade

05 Foreword from the Consul-General of the

People’s Republic of China in Melbourne

06 Foreword from the Governor of Jiangsu

08 Execuve Summary

10 Key Outcomes

12 Victoria and China in context

16 Direcon One: Strengthen government alliances within

China’s economic development zones

20 A high-tech innovaon partnership with Jiangsu Province

21 Collaboraon with Sichuan Province

22 Direcon Two: Establish Victoria as Australia’s centre

of excellence for Asia insights and capabilies

24 Direcon Three: Build connecons through reciprocalcultural partnerships and establish new plaorms

for people-to-people engagement

26 Direcon Four: Aract investment, including into

the Government’s infrastructure pipeline,

to support Victoria’s connued economic growth

30 Direcon Five: Supporng successful

business engagement with China

34 Direcon Six: Target trade acvity according

to Victoria’s compeve strengths and specic

market opportunies in China

38 Implementaon and next steps

The Lotus Building andPeople's Park in Changzhou,Jiangsu Province. Designed byMelbourne-based studio505


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The Chinese community has

been a part of our

community even before

Victoria was a State. In

1901, a tradional Chinese

dragon marched through the

streets of Melbourne in the

ocial parade that marked

the formaon of our country.And every year since, the

sheer ingenuity and integrity

of Chinese migrants and visitors has helped make our state a

prouder, more prosperous place. It’s always been this way

– and it always will.

More Chinese students are studying at our universies, and

we are honoured to host them. More Chinese tourists are

vising the beauful reaches of our state. More Chinese

businesses are invesng here in Victoria: Australia’s industrial

heartland and its capital of new ideas.

It’s a special partnership that’s built not on transacons, buton trust and tradion. We can’t take it for granted. We want

to rene and perfect this partnership so it is even stronger in

the future. That’s what our New China Strategy is all about.

I travelled to China in September 2015, in my rst ocial

overseas visit as Premier of Victoria. And I pledge to visit

China every subsequent year that I am privileged to hold this

oce. While I was there, I had many conversaons with our

Chinese friends about how we can work together as partners.

I’m proud to tell you that Victoria and Jiangsu Province – our

oldest and most enduring sister state relaonship – have

joined forces under a new innovaon and technological

agreement. We’ll be converng our best ideas into sharedcommercial interests that will support the next generaon of

Chinese and Victorian growth.

I can also tell you that Victoria and China’s booming Sichuan

Province will work towards becoming sister states in 2016.

This is a big deal.

This new relaonship will be Victoria’s anchor in China’s

fastest growing region and our gateway to its people.

Our cooperaon will centre on the liveability of our cies.

We’ll be working together to build smart and sustainable

cies for the next century – sharing our ideas in design,

environmental protecon, educaon and health.

Businesses here in Victoria tell me they want more assistance

to reach into Asian markets. They want a louder voice.

And our new China Strategy sets a target to make Victoria the

naon’s Asian gateway – the place to go if you want to gain

insight and get the deal done.

There’s so much China and Victoria can achieve together.

We both have our economic challenges, but our combined

potenal is greater than all of them.On behalf of the Victorian Government, I am so proud to

hand down our new China Strategy. Ours is a powerful

partnership. And it will only get stronger from here.

The Hon Daniel Andrews MP

Premier of Victoria

Premier’s Foreword


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Although my tle is the

Minister for Trade, I rmly

believe that before there

can be a trade and an

economic relaonship,

there has to be a personal

relaonship. There can

never be economic

opportunity unless there isrst a friendship.

To that end, I am focused on building on the already strong

friendships between Victoria and China.

We have many connecons between our people already.

The Chinese community in Victoria has a 150 year history,

our Chinese community is a vital cornerstone of our

successful mulcultural community and we are all richer

for the Chinese contribuon to our culture, from food

to fesvals.

More than a quarter of a million Victorians have Chinese

ancestry – there are many family es between Victoriaand China.

Around 58,000 Chinese students are enrolled in Victoria’s

world-class educaonal facilies each year – and those

58,000 students take home with them a deep

understanding and appreciaon of Victoria, and leave

behind them a beer understanding in our own community

of China. The friendships they form with their fellow

Victorian students form an important link between our

people, now and into the future. In November 2015, I met

with some of our Victorian alumni in Shanghai, and heard

about their experiences in Victoria and their ongoing

connecons and friends within our state.

On top of our connecon with our past students, the depth

of our friendship is reected in the nearly 439,000 Chinese

tourists we welcome to Victoria each year. While they do

not stay as long as our internaonal students do, they sll

take back home a rst-hand appreciaon for everything

Victoria has to oer, and create another connecon

between our people. And we know Victorians are vising

China too, with 38 direct ights between Melbourne and

desnaons in China each week carrying Victorians whocome home with a new appreciaon of Chinese culture and

the Chinese people.

Connuing to foster and grow our relaonships and build

upon our friendship remains my number one priority.

Thank you

The Hon Philip Dalidakis

Minister for Small Business, Innovaon and Trade

Foreword from the Minister for Small Business,Innovation and Trade


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Victoria is playing a

signicant role in the strong

development of the

China-Australia

comprehensive strategic

partnership. The 36 year old

sister-state relaonship with

Jiangsu keeps ourishing,

and their all-roundcooperaon has produced

tangible results which have, in turn, further promoted

mutual understanding and friendship. Victoria’s friendly

cooperaon with Sichuan is also making encouraging

progress.

In September 2015, Premier Daniel Andrews paid an

ocial visit to China, the rst internaonal visit since his

premiership. The visit was well-received and highly

producve. In Jiangsu, a series of agreements opened a

new chapter of the Victoria-Jinagsu partnership; in Sichuan,

a new sister-state relaonship was iniated; in Beijing,

a highlight of the visit, a ve-year Cultural ExchangeAgreement was signed between the state of Victoria

and the Chinese Ministry of Culture’s Internaonal

Culture Associaon.

This ve-year Cultural Exchange Agreement was the rst of

its kind between the Chinese Ministry of Culture and a state

government of a foreign country. It showcases the

importance of Melbourne’s role as the “Cultural Capital of

Australia”; it is also a recognion of Victoria’s connued

eorts in promong cultural exchanges with China. Among

the many cultural exchange programs, the MSO’s Chinese

New Year Concert has become an annual aracon to

music lovers, and the “A Golden Age of China: QianlongEmperor” exhibion impressed everyone by a

record-breaking 66,700 visitors. What’s more, the 58,000

internaonal students from China add great vitality to the

educaonal cooperaon between China and Victoria. It is

such full-scale high-quality cooperaon and exchange that

is culvang a deeper understanding and lasng friendship

between our peoples and making Victoria’s relaonship

with China “above transacon.”

China, an important engine for world economy, is

experiencing a major economic transformaon and

upgrade. So is Australia. Given that our two economies are

highly complementary, there are tremendous opportunies

for future cooperaon. In the post-mining boom era,

Australia is to benet from the approaching FTA boom.

Victoria, being blessed with compeve agriculture

and other great potenal, will undoubtedly benet

from ChAFTA.

The Andrews Government of Victoria has seized this historic

opportunity in developing a new China Strategy. Outlining a

praccal plan for Victoria’s cooperaon with China, the

Strategy reects the profound thinking and far-sighted

vision of Premier Andrews and his government on the

China-Victoria relaonship. In the process of developing this

Strategy, the Andrews Government reached out to Jiangsu

and Sichuan and embraced their ideas, making sure the

Strategy is a well-targeted and eecve one. What’s more

impressive is that a Chinese version of the Strategy is to be

released together with the English version.

I warmly congratulate the introducon of this Strategy, and

am convinced that the Strategy will live up to expectaons.

As Consul-General of China in Melbourne, I am delighted to

witness that China-Victoria cooperaon bears rich fruit. It is

my duty and my will to connue to spare no eorts in

promong this mutually benecial relaonship.

Mr Song Yumin

Chinese Consul General in Melbourne

Foreword from the Consul-General of thePeople’s Republic of China in Melbourne


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In 1979, Jiangsu

Province formally

established the twinning

relaonship with the

State of Victoria as its

rst overseas sister

state. Over decades,

guided by the principles

of complementarity,mutual benet and

win-win outcomes, the partnership between Jiangsu

and Victoria has made remarkable progress across trade

and investment, educaon, culture, science and

technology, health, environmental protecon and

tourism, and best exemplied the sub-naonal

cooperaon between China and Australia.

The connuous deepening of the Jiangsu-Victoria

friendship is greatly aributed to the concerted eorts

of both the Jiangsu and Victorian governments. Since

the relaonship was instuonalised, the two regions

have maintained frequent exchange of visits betweensenior leadership. Last September, the Premier, the Hon.

Daniel Andrews, visited Jiangsu during his rst overseas visit

aer assuming oce, which fully demonstrates the

signicance of Jiangsu-Victoria relaonship to the new

leadership of the Victorian government. I want to applaud

Premier Andrews’s concept of “transcending transacons

and building mutual trust” and his great eorts in

priorizing the China Strategy as one of the most signicant

development strategies of the Victorian Government.

In November 2014, the successful visit of Chinese President

Xi Jinping to Australia opened a new chapter of the China-

Australia Comprehensive Strategic Partnership. The newlyenacted China-Australia Free Trade Agreement will unleash

tremendous opportunies for trade and investment

cooperaon between the two countries. Considering the

high complementarity of our economies and the close

partnership, the potenal for future Jiangsu-Victoria

collaboraon will be enormous in the new era of the

China-Australia relaonship.

Jiangsu Province stands ready to deepen its relaonshipwith the State of Victoria through implemenng the

important consensus reached by our naonal leaders under

the framework of the China-Australia Comprehensive

Strategic Partnership. We will connue the endeavor to

open up a new horizon of cooperaon and development at

the fresh starng point under the China-Australia Sub-

naonal Leaders Dialogue mechanism, and promote trade

and investment cooperaon in advanced manufacturing,

technology innovaon, health and medical care,

environmental protecon, smart transportaon, modern

service industry and agriculture, as well as people-to-

people and cultural exchanges.

It is my rm belief that the me-honored friendship

between Jiangsu and Victoria will connue to ourish, the

prospect of our partnership will be even brighter, and the

well-being of our peoples will be constantly increased.

Governor of Jiangsu Provincial People’s Government

Foreword from theGovernor of Jiangsu


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Nanjing Skyline


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Executive Summary

Victoria has been building partnerships with China for over

150 years. Our sister state relaonship with Jiangsu

celebrates its 37th anniversary this year. And Victoria’s large

and vibrant Chinese community contributes signicantly to

the success of our State.

The best partnerships are dynamic—they respond to changing

circumstances, they innovate to take advantage of new

opportunies, and they work together to benet each other.That’s what Victoria will be seeking to do as we move

through the Asian Century. The alignment of Victoria’s

compeve strengths and China’s needs is powerful. And

this alignment is reciprocal: Victoria faces challenges that

would benet from Chinese experse. Therefore, the

Victorian Government, the Chinese Naonal Government,

and the Jiangsu and Sichuan Provincial Governments have

worked together while developing this Strategy, to idenfy

major iniaves that we can implement together.

Victoria’s partnership with China—just like all good

partnerships—needs to be strongly grounded in mutual

respect, trust and understanding. And this needs to be the

case not just between our governments, but also between

businesses, communies and individuals. Therefore, this

Strategy focuses strongly on improving connecons

between Victoria and China at every level: creang new

relaonships and strengthening our capability to engage

eecvely. These connecons will not only enrich Victoria’scultural fabric, but they are a necessary foundaon for

realising fully the potenal economic benets of

our partnership.

The Victorian Government’s vision is that Victoria becomes

the gateway connecng China and Australia. This Strategy

sets out a pathway to achieving that vision. It is built around

three themes, or organising principles—that will guide the

development of the Victoria–China relaonship over the

long term—and six direcons—that align with these themes

and will drive the immediate acons of Government.

These are set out on the facing page.


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Vision愿景

That Victoria becomes China’s gateway to Australia based on the strength of

our connecons and the depth of our understanding of each other’s people,

culture and economic needs.

维多利亚州与中国之间联系紧密、对于双方人民、澳中文化以及两国经济需求有深入的了解。维多利亚州愿能成为中国进入澳大利亚的大门。

Themes主题Deeper understanding深入了解

Victoria’s engagement with

China will reect a deeper

understanding of the Chinese

people, culture and

economic needs – and

Victoria will work with China

to build a similar

understanding of Victoria

and Australia.

Genuine connecons 诚挚合作

Victoria will build substanve

and enduring connecons

with China at every level –

between our governments

(including at the bilateral

provincial level), businesses,

communies and individuals.

Mutual prosperity共享繁荣

Victoria will work with China

to idenfy economic

opportunies that target the

intersecon of Victoria and

China’s respecve

comparave advantages and

development needs –

maximising the mutual

economic value of our

relaonship.

Directions行动说明

Strengthen government alliances within China’s economic development zones—providing

a clear focus to our eorts while creang an entrée to broader engagement with China

加强与中国经济开发区政府的往来，明确工作开展方向及目标，

同时为更广泛的澳中合作奠定基础

Establish Victoria as Australia’s centre of excellence for Asia insights and capabilies

推动维多利亚州成为澳大利亚拥有亚洲视野及能力的卓越中心

Build connecons through reciprocal cultural partnerships and by establishing new

plaorms for people-to-people engagement 通过文化交流合作，建立联系，并为人员之间的交流搭建新的平台

Aract investment, including into the Government’s infrastructure pipeline, to support

Victoria’s connued economic growth

为一系列项目(包括政府大型基础设施项目)吸引投资，

以此为维多利亚州经济的持续增长提供支持

Support successful business engagement with China

为成功的澳中商业往来提供支持

Target trade acvity according to Victoria’s compeve advantages and idened market

opportunies in China

根据维多利亚州的竞争优势以及经确认的中国市场机会，制定具针对性的贸易活动

Victoria’s new approach to engaging China


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Direction one:

Strengthen government

alliances within China’s

economic development

zones – providing a clear

focus to our eorts while

creang an entrée to

broader engagement

with China

Direction two:

Establish Victoria as

Australia’s centre of

excellence for Asia

insights and capabilies

Direction three:

Build connecons

through reciprocal

partnerships and by

establishing new

plaorms for people-to-

people engagement

Key Outcomes

Outcomes:

• Existing and new government to governmentrelationships will be strengthened through buildingnew collaborations in mutually beneficial areas,including in innovation with Jiangsu Province.

• A sister state agreement with Sichuan Province will beformalised by the end of 2016.

• A new Deputy Commissioner for China with

responsibility for Western China will be appointed bythe end of 2016.

Outcomes:

• A coordinated approach to building Asia insightsand capabilities will be developed betweengovernment, businesses and the educationsector to promote innovation and develop skillsfor the future.

Outcomes:

• Cultural collaborations with China will increase,resulting in additional inbound and outboundcultural exchanges in film, sport and performingand visual arts.

$6.5 billion2014

$11.5 bill ion2026

Victoria’s totalshare of Chineseinvestment to Australia toincrease from8 per cent to20 per centby 2026.

Victoria’sexports to Chinaanticipated toincrease by over$5 billion over thenext 10 years.

2014

8%

2026

20%

More Investment and Jobs More Trade


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Direction four:

Aract investment,

including into the

Government’s

infrastructure pipeline, to

support Victoria’s

connued economic

growth

Direction five:

Support successful

business engagement

with China

Direction six:

Target trade acvity

according to Victoria’s

compeve advantages

and idened market

opportunies in China

Outcomes:

• Victoria’s total share of Chinese investment to Australia to increase from 8 per cent to 20 per centby 2026.

• Victorian Government to attract and facilitate$2 billion of Chinese investment into the State,creating 3,000 new jobs within the next ten years.

Outcomes:

• Victorian businesses will increase their engagement with Asia, supported by tailored export supportprograms; inbound and outbound trade missionsand increased awareness of new market trends andopportunities, including those related to e-commerceand the China-Australia Free Trade Agreement.

Outcomes:

• Victoria’s exports to China anticipated to increase byover $5 billion over the next 10 years.

• Overnight expenditure by Chinese visitors to Victoriato increase from $2.2 billion in 2015 to over $3.4billion by 2026.

• Chinese post-graduate student enrolments in Victoriato grow by 25 per cent over the next 10 years.

$2.2 billion2015

$3.4 billion2026

Overnightexpenditure byChinese visitors to Victoria to increasefrom $2.2 billionin 2015 to over$3.4 billion by2026.

Chinese post-graduate studentenrolments in Victoria to growby 25 per centover the next10 years.

More Visitors More Students

14,500 students2015

18,125 students2026


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Our Chinese community is thefoundation of our partnershipPeople are at the heart of our relaonship with China.

Victoria’s early connecons with China contributed to the

state’s vibrant mulculturalism and laid the foundaon for a

thriving Chinese community. Today, Victoria is home to one

third of the Chinese-Australian populaon. Our Chinese

community contributes signicantly across business,academia, science and many other areas, as well as sharing

their rich cultural heritage with the Victorian community.

Our government relationships havebuilt trust and facilitated collaborationWe built on our early cultural connecons to establish the

close government-to-government relaonships that have

underpinned Victoria’s success in China to date, such as our

strong sister state relaonship with Jiangsu Province, which is

in its 37th year. Our government es are further strengthened

through around 20 sister city relaonships at the municipal

level. These relaonships promote polical and economic

dialogue and provide opportunies for cizens to parcipate

in educaonal, professional and cultural exchanges.

Over me, these government connecons have led to a

strong physical presence in each other’s jurisdicons.

Victoria now has the largest business oce network of any

Australian state or territory in China, as well as a dedicated

Commissioner based in China and a tourism presence.

And Melbourne is home to a Chinese Consulate-General,

a representave of the Jiangsu Provincial Government, and

the Jiangsu Educaon Services for Internaonal Exchange.

Our economic cooperationhas delivered mutual benefitsChina currently ranks as Victoria’s largest two-way

merchandise trading partner. It’s also our leading source of

internaonal students, investor and business migrants and

internaonal tourists.

Of course, Victoria is not alone in claiming China as its

largest trading partner. However, our schools and teraryinstuons have fostered many Chinese students through

their formave years and built their English language

capabilies; our businesses have shared their knowledge

and experse, helping to drive innovaon; and our premium

quality and safe food and beverage products are renowned

in China and in high demand. Engaging with Victoria also

oers China genuine insights into Western business

pracces within its own region.

Victoria and China in context

Strong ties between governments, communities andbusinesses have defined Victoria’s history with China

$20.4bn

29.4%

140%

37

58K

VALUE OF TWO-WAY MERCHANDISETRADE

SHARE OF AUSTRALIA’S CHINA-BORN POPULATION

GROWTH OF GOODSEXPORTS TO CHINA

YEARS

CHINESEINTERNATIONALSTUDENTS

Value of Victoria’s two-way

merchandise trade with China

in 2014-15—Victoria’s largest

trading relaonship

The share of Australia’s

China-born populaon living

in Victoria

Growth of Victorian goods

exports to China over the last10 years

Length of the Victoria-Jiangsu

sister state relaonship,

Victoria’s rst and oldest

Chinese internaonal

students enrolled in Victorian

schools and terary educaonproviders in 2015

LENGTH OF SISTERSTATE RELATIONSHIP


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Melbourne's Chinatown


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Changing economic landscapes in Chinaand Victoria will bring us even closer togetherChina, home to the world’s largest populaon and with the

second largest economy, plays an increasingly important and

inuenal role in the global economy. It is transforming itself

from a centrally planned and investment-driven economy to

a market and consumpon-led economy. Its industry is

shiing from low cost manufacturing to higher value goodsand services. And as it connues its transformaon into a

modern, globally-integrated and technological society, with

slower but more sustainable growth, it is accomplishing

impressive feats such as building the largest high speed rail

network in the world.

Victoria is also changing. We are Australia’s second

largest economy—open, stable and connuing to grow.

However, structural changes (parcularly declining

manufacturing) are creang employment challenges,

especially for low skilled, youth and regional Victorians.

Victoria’s increased internaonal focus provides unmatched

access to capital, economies of scale, new markets andinternaonal experse. Increasing internaonal trade allows

businesses to expand beyond the limits of the domesc

market, increasing both employment and producvity.

And engaging with internaonal partners opens avenues

for collaboraon, learning and cultural exchange.

Like China, growth in knowledge intensive industries and the

services sector posions Victoria for the greatest future

economic growth and prosperity. The China–Australia Free

Trade Agreement will make it easier to partner in these areas.

We each have the capabilities to helpthe other achieve their aspirationsKey demographic changes and increased rates of

urbanisaon and consumpon, together with industry

transformaon, are challenging our Chinese partners.

China’s urban residents are expected to account for

70 per cent of the populaon by 2030, while the populaon

share of people aged over 60 years could reach 27 per cent.

China’s private consumpon (currently only 37 per cent of

its GDP) will connue to grow as incomes rise.

These factors have led to new policy goals for the Chinese

Government, as reected in the 13th Five Year Plan.

Victoria’s high value goods and services sectors can helpChina to achieve these goals (gure 1.1). And, for Victoria,

it is growth in these sectors that will secure the state’s

future economic prosperity.

Achieving this level of collaboration willdepend on the strength of our relationshipsand deep mutual understanding of cultureWe will build the next chapter of Victoria–China relaons

by maturing our relaonships at the government, business,

community and individual levels. Building our collecve

cultural competence makes our interacons more engaging,

more meaningful and, ulmately, more producve.Victoria is striving to develop the cultural capabilies and

language skills of our current and aspiring leaders, as well as

skills of future generaons, to drive increased and

meaningful engagement. To help, we will create and

implement plaorms to support engagement, such as the

Regional City Alliance, enhance our sister state relaonship

with Jiangsu Province and build new connecons across

China, including with Sichuan Province. We will also engage

closely with our Chinese diaspora, who stand as informal

ambassadors for their language and culture and are a

conduit for strengthening our es with China.

We will also drive engagement through cultural exchange—in the areas of arts, design and sport. Cultural acvies

appeal to wide audiences and help us to recognise our

similaries as well as appreciate our dierences.

Victoria believes that the six direcons in this Strategy will

achieve our vision for the future of the Victoria–China

relaonship—a relaonship that transcends the

transaconal and is built on a deep understanding of each

other’s people, culture and economies; has genuine

connecons between governments, businesses and people

at its foundaon; and draws on complementary strengths

to drive mutually benecial outcomes.

It is time to progress to a more modern and sophisticatedpartnership based on collaboration at all levels

254K

439K

VICTORIANSWITH CHINESE ANCESTRY

CHINESE VISITORS

Victorians with Chinese

ancestry—including 112,000

Chinese born Victorians—

represenng approximately

one third of the Chinese–

Australian populaon

Esmated Chinese visitors to

Victoria in 2014-15. China is the

largest and fastest growing source

of internaonal visitors to Victoriaover the past 5 years


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China’s emerging policy directionsand challenges

Victoria’s established and emerging capabilities

Priorising the development of innovaon industries:

supporng sectors to become globally compeve and

the backbone of China’s future economy including

biotechnology, new energy, new materials and next-

generaon informaon technology.

Developing China’s West: invesng in new

infrastructure, providing new services (including aged

care and educaon), encouraging foreign investment and

promong ecological development to balance

development across the country.

Supporng sustainable and ecological development:

advancing ‘ecological civilisaon’ and promong green,

low-carbon, climate resilient and sustainable

development, including through a naonwide carbon

trading scheme and commitments to renewable power

and green buildings.Reforming the healthcare system: re-thinking China’s

healthcare system to ensure that healthcare is accessible

to all Chinese cizens and that its aged care system is

adapted to the demands of an ageing populaon.

Supporng the e-commerce sector: supporng Chinese

cizens to source quality goods online, including safe and

quality food and beverages, and luxury and leisure goods

and services by regulang the e-commerce sector to

ensure authencity of goods and quicker delivery mes.

One Belt One Road iniave: aiming to create a chain of

infrastructure projects, with seed funding from the newAsian Internaonal Infrastructure Bank, that will revive

the ancient Silk Road as a modern transit, trade and

economic corridor, covering a populaon of 4.4 billion

and an expected economic output of $21 trillion.

Increasing demand for educaon: with rising incomes

and structural economic change, the demand for

educaon is expected to rise and change, as students seek

beer preparaon for employment in China’s growing

service industries and higher value-added manufacturing

sectors, and can aord an overseas educaon.

Strengths in innovaon: including medical technology

and the life sciences, new energy, and advanced

manufacturing technologies—increased collaboraon

can help China pivot towards sustainable growth and

higher value industries.

Liveability credenals: our urban design, sustainability,

educaon, health, creave industries and new energy

technology providers can partner with Chinese provinces

to build cies that respond to urbanisaon pressures and

realise the Chinese Government’s ecological and

sustainable development goals.

A world-class medical sector: our health providers,

medical researchers, and medical technology and

pharmaceucal manufacturers can provide innovave

soluons to help China reform its naonal health system.

Food and bre: our agricultural sector producespremium quality food—including meat, dairy, fruit, grains,

wine and vegetables—from clean and safe sources.

Tourism and major events capabilies: our creave and

cultural sector and visitor economy is world-class and

can assist our Chinese partners to successfully showcase

their creave industries, develop cultural precincts to

provide more leisure acvies for the growing middle

class and host global events.

High value professional services: our services sector has

world-class capabilies and can help meet China’s

increasing demand for more sophiscated services as itseconomy diversies, its people become wealthier and it

looks to meet its infrastructure ambions.

Internaonal educaon: our educaon sector is well

placed to meet China’s rising demand for high quality

educaon—we have world-class schooling and terary

instuons that can deliver services in China and

provide a premium experience for internaonal

students coming to Victoria.

Figure 1.1 – Alignment between China’s emerging policy direcons and Victoria’s established and emerging capabilies.


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The scale of opportunity in China for Victorian businesses

cannot be understated. China’s total goods and services

imports have grown 387 per cent from 2003–13. And the

opportunies available for Victorian businesses will grow

substanally with the China–Australia Free Trade

Agreement (ChAFTA). But Victoria is also one of many states

and countries currently operang in the Chinese market.

To have an impact, Victoria will focus its eorts on

partnering with Chinese provinces in key regions withcommon interests and abilies. Provincial level partnerships

can facilitate access within broader economic zones and

market clusters and be anchors for Victoria’s engagement

across China.

Opening doors in ChinaThe Victorian Government will pave the way for enhanced

engagement with China. This is parcularly important in China,

where government plays a crical role in business, and

inuences trade and investment outcomes. To achieve this, the

Premier will visit China annually and every Minister will travel

to China during the rst and subsequent terms of government.The Victorian Government will also idenfy opportunies to

share its policy experse to open doors for new kinds of

collaboraon—as is currently occurring in healthcare.

Anchoring our engagementthrough partnerships with Jiangsu andSichuan ProvincesJiangsu remains one of Victoria’s most important global

partners based on our thriving sister state relaonship that

was established in 1979. We have a history of successful

trade missions, visits, business programs, and educaon,

health and cultural links. Situated in China’s well developedeast, Jiangsu is China’s second largest provincial economy

and is Victoria’s entrée into the Yangtze River Delta

Economic Zone.

Sichuan is a key province in the Chinese Government’s

Western Development Plan and one of China’s fastest

growing provincial economies. Victoria has a relavely new

relaonship with Sichuan, but it’s already delivering benets

for both sides. The Leer of Intent signed with Sichuan as

we developed this Strategy—comming to a sister state

relaonship in 2016—will be crucial for Victoria’s

engagement with China’s burgeoning west and the West

Triangle Economic Zone.

Victoria’s engagement across China will also be supported

through its network of Victorian Government Business

Oces (VGBOs) located in each of the key areas for

Victoria’s economic engagement in China: Shanghai, Beijing,

Hong Kong, Nanjing and Chengdu, and its tourism presence

in Shanghai and Guangzhou.

Direction one: Strengthen government alliances within China’s economic development zones—providing a clear focus to our efforts while creating anentrée to broader engagement with China

Case studyJiangsu

Victoria’s sister state relaonship with Jiangsu has led

to many highly producve cooperave arrangements:

The Innovaon and Technology Collaboraon

Agreement will strengthen the scienc,

technological and industrial cooperaon between

Victoria and Jiangsu through joint research and

development (R&D) acvies.

The Victoria-Jiangsu Joint Economic Commiee,

established in 1987, meets every two years,

to reect on the relaonship and agree to new areasof cooperaon.

Educaon partnerships between the Department of

Educaon and Training and the Jiangsu Provincial

Department of Educaon have resulted in enormous

growth of sister school partnerships and student

mobility between Victoria and Jiangsu Province.

The Hamer Scholarship Program, established in

2012, allows Victorian professionals to undertake

intensive Chinese language study and cultural

immersion in Jiangsu.

Monash University’s Suzhou campus, established in2012, is a partnership with Southeast University.

Monash is the rst Australian university licensed to

operate in China.

Sichuan

Victoria’s relaonship with Sichuan is relavely new, but

has already delivered mutually benecial outcomes:

The Leer of Intent signed between the Victorian

Government and the Sichuan Government will lead to

the signing of a sister state agreement in 2016.

The Sister Park Agreement between the Phillip Island

Nature Parks and the Chengdu Giant Panda Breeding

Centre encourages new iniaves in tourism,

environmental conservaon and scienc research.


17/4017

Victoria will:• strengthen government-to-government relaonships

through the Premier’s annual trips to China and visits

by all Cabinet Ministers during each term of

government, and encourage reciprocal visits by

key partners

• leverage Victoria’s world-class policy frameworks as

the basis for new collaboraons with China, aimed at

strengthening government es and creang new

economic opportunies

• increase resources for the VGBOs in China, including

appoinng a new Deputy Commissioner for Victoria

for Western China.

Victoria and Jiangsu will :

• enhance the sister state relaonship by enabling

government ocials to collaborate more closely

between biennial meengs of the Victoria-Jiangsu

Joint Economic Commiee.

Victoria and Sichuan will :• formalise their relaonship by signing a new sister

state agreement in 2016, which will anchor Victoria’s

engagement in the burgeoning southwest of China.

Case studyGovernment relationships

building opportunities in health

The demand for healthcare in China is growing at

an ever increasing rate and China is undertaking an

enormous reform agenda to meet this demand.

The reform will eventually be implemented in over25,000 hospitals naonwide aer pilong in ve

cies, fundamentally changing the healthcare

landscape in China.

Through our government relaonships, Victoria’s

healthcare and biosciences industries can help

Chinese governments deliver this reform. In

September 2015, the Premier nalised two health

collaboraon agreements with Jiangsu and Sichuan

Provinces. These agreements provide scope to

jointly design hospitals and clinics, train health sta

and medical specialists, and promote the use of the

latest medical technologies. They open upunprecedented opportunies for Victorian health

educaon and training providers, hospital operators

and consultancies.

8.4%

7.5%

FORECASTGROWTH RATE

LARGESTECONOMY

FORECASTGROWTH RATE

LARGESTECONOMY

Jiangsu’s forecast growth

rate in 2015

On its own, Jiangsu’s economy

would have ranked as the 16thlargest economy in the world

in 2014

Sichuan’s forecast growth

rate in 2015

On its own, Sichuan’s economy

would have ranked as the 28th

largest economy in the worldin 201428

TH

16TH

Premier DanielAndrews and

Execuve Vice Mayorof Beijing Li Shixiang


18/4018

Shanghai viaduct


19/4019

West TriangleEconomic ZoneMajor cities

Chengdu(2014 GDP: US$163.7bn)

Chongqing(2014 GDP: US$232.22bn)

Victorian connection

VGBO in Chengdu since 2013

Sichuan is a future sisterstate partner for Victoria

Economic profile

The regional economicdevelopment plan arculatesthis Zone would become oneof the strongest regions inChina by 2020.

Naonal support is providedfor industries including:tourism, nancial services

and technology developmentand services, coupled withstrong environmentalprotecon requirements.

Pearl River DeltaEconomic ZoneMajor cities

Guangzhou(2014 GDP: US$271.84bn)

Shenzhen(2014 GDP: US$260.48bn)

Note: Economic Zone

excludes Hong Kong Victorian connection

No direct presence, butincreasing focus (parcularlyvia the Hong Kong VGBO,established in 1990)

Economic profile

The regional economicdevelopment plan aims todevelop this region as acentre of advancedmanufacturing and modern

services regions, as well as acentre for internaonalshipping logiscs, trade,conferences, exhibionsand tourism.

Bohai Economic Rim

Major cities

Beijing(2014 GDP: US$347.24bn)

Tianjin(2014 GDP: US$255.95bn)

Victorian connection

VGBO in Beijing since 2012

Economic profile

This region has a strongfocus on heavy industriesand manufacturing, and is agrowth cluster forautomove, electronics andpetrochemical industries.

Addional strengths includeeducaon and R&D (Beijing)and aviaon, logiscs andshipping (Tianjin).

Yangtze River DeltaEconomic ZoneMajor cities

Shanghai(2014 GDP: US$383.55bn)

Suzhou(2014 GDP: US$228.87bn)

Nanjing

(2014 GDP: US$141.7bn) Victorian connection

VGBO in Shanghai since 2006and Nanjing since 2003

Jiangsu has been a sisterstate of Victoria since 1979

Economic profile

Heavily industrialised regionwith advanced transportinfrastructure.

Strengths in nance,

banking, property andlogiscs (Shanghai),automove (Shanghai andNanjing) electronics,educaon and energy(Nanjing) and manufacturing(Suzhou).

Guangzhou

Fuzhou

Hangzhou

Nanjing

Ji’nan Qingdao

Daljan

Shijiazhuang

Shenyang

Changchun

Harbin

Xining

Lanzhou

Xi'an

Taiyuan

ChengduWuhan

Zhengzhou

Hefei

Kunming

Guiyang

ChangshaNanchang

Haikou

Hong Kong

Macau

Ürümqi

Lhasa

Yinchuan

Hohhot

Nanning

Chongqing

Shanghai

TianjinBeijing

Victoria’s engagement with China’smain economic zones

Victorian Government Business Oces

Tourism Victoria oce


20/4020

A high-tech innovation partnership withJiangsu Province will convert 21st centuryideas into shared commercial interestsVictoria and Jiangsu are both centres of innovaon.

Victoria has a highly skilled workforce and a history of

innovaon. We have a world-class university sector and

R&D community with strengths in advanced manufacturing,

advanced materials, biotech, food and bre and health

related products and services.The Chinese Government ranks Jiangsu as its top province

for innovaon and Jiangsu receives the most patents of any

Chinese province.

Why should Victoria and Jiangsu work together?

Both governments are looking for opportunies to innovate

and create the jobs of the future. Working together, Victoria

and Jiangsu can realise the commercial potenal of their

R&D capacity.

During the Premier’s visit to China in September 2015,

Victoria and Jiangsu announced a major new agreement at

the Jiangsu Industrial Technology Research Instute thatwill strengthen our scienc, technological and industrial

cooperaon. We will focus our cooperaon on areas of

mutual interest, such as clean technology and

environmental protecon innovaon, which are priories of

both pares. Ongoing praccal partnerships will provide a

pipeline of new ideas that will be converted into new

companies and jobs, thereby sharpening our economy’s

dynamic edge.

How do we all benefit?

Internaonal R&D partnerships generate commercial

innovaons with spillover benets – internaonal networks

and further investment. Victorian entrepreneurs and

researchers can also access China’s booming market from

sectors with extraordinary growth potenal.

Joint projects will complement exisng innovaon

cooperaon such as the Monash University–Southeast

University Joint Research Instute (focusing onnanotechnology, bioinformacs, water, energy and

advanced manufacturing) and the Burnet Instute’s Nanjing

BioPoint Diagnoscs Technology laboratory (developing

diagnosc tools in areas of unmet medical need).

This new partnership is part of the Government’s broader

innovaon strategy and will build on the $60 million already

commied to the LaunchVic iniave, which supports

entrepreneurs to make their ideas a commercial reality.

City Wall of Nanjing

Victoria and Jiangsu will :• drive high tech and R&D collaboraon between

businesses and research instuons.


21/4021

Collaboration with Sichuan Province canprovide a platform for developing smart andliveable cities and precincts in ChinaVictoria and Sichuan have strong liveability credenals.

Victoria has gained a strong reputaon for liveability

through its strengths across the full range of liveability

areas, including urban design, sustainability, environmental

protecon and management, cultural precinct

development, governance and health and educaonservices. Melbourne—Victoria’s capital—has ranked as the

world’s most liveable city for ve consecuve years. And in

2012, Port Fairy—a Victorian town—was ranked as the

world’s most liveable town with a populaon under 20,000.

Sichuan is one of China’s largest provincial economies,

with real GDP growth of 8.5 per cent in 2014. Chengdu—

Sichuan’s capital—is mainland China’s most liveable city and

was idened as one of this decade’s fastest growing cies.

Chengdu was also one of the rst cies to be approved as a

Naonal Ecological Environment Demonstraon Area. It is

forging ahead with a new development model that ensures

urbanisaon is ecological and sustainable.

Why should Victoria and Sichuan work together?

Victoria and Sichuan will benet from each other’s experse.

Victoria has a long history of environmental governance,

and has the world’s second oldest environmental regulatory

agency. Our strong capabilies in managing air and water

polluon and providing eecve waste management

soluons are directly relevant to challenges stemming from

China’s rapid industrialisaon and urbanisaon. Our health

and educaon systems have also been key to aracng a

growing populaon and investment to the state.

Sichuan’s experience of rapid populaon growth has built

experse in a number of areas including urban

development, infrastructure planning and new energy

technology development. Victoria can learn from this

experience as it faces a period of the highest populaon

growth of any Australian jurisdicon and aspires to maintain

its liveability reputaon into the future.

How do we all benefit?

Through our future sister state relaonship, Victoria andSichuan will partner to realise our joint ambion to develop

smart and liveable cies. This partnership will capitalise on

our respecve strengths, which have earned Melbourne

and Chengdu their liveability credenals.

This partnership will provide a plaorm for Victorian and

Sichuan businesses to be soluons brokers for Chinese cies

seeking to improve their liveability. Our governments will

partner with industry to exchange experse and promote

business engagement in health, educaon, the creave

industries, urban design and other professional services.

It can be expected that demand for all of these services will

increase exponenally as China connues to strive towardecient, inclusive and sustainable urbanisaon.

Victoria and Sichuan will:• partner to become a soluons broker for Chinese

cies seeking to become more liveable cies,

connecng their respecve public and private

experse to opportunies stemming from China’s

urbanisaon challenges

• develop knowledge exchange and research

collaboraon iniaves in liveability sectors.

Tianfu Square, Chengdu


22/4022

As Victoria’s relaonship with China matures, our

engagement will progress from a transaconal nature to

collaborave relaonships that generate more

producve outcomes.

To realise these benets, the Government aims to establish

Victoria as Australia’s centre for excellence for Asia insights

and capabilies.

Driving the development of Asia insights and capabilitiesThe Government is determined to make Victoria the gateway

between China and Australia. Victoria’s intercultural

competence makes us a natural point of contact for Chinese

wanng to do business in Australia, as well as for Australians

wanng to do business in China. And we have exceponal

access to internaonal business chambers and a base of

instuonal excellence for engaging with Asia.

Therefore, the Government is seng a target of making

Victoria Australia’s preeminent state for understanding and

engaging with Asia. In parcular, we will accelerate eorts toaain stronger Asia capabilies in government, business and

educaon, and of Asian market and consumer insights that

smulate business innovaon and export success.

Building the skills of the next generationAs part of our commitment to establishing Victoria as theEducaon State, we are equipping young Victorians for thisAsian Century. The new Victorian Curriculum incorporatesstudies of Asia, intercultural capabilies, and other crical

skills for engaging with China and Asia. Languages, includingAsian languages, are also a key element of the Victorian

Curriculum. Over 52,000 Victorian students in VictorianGovernment schools study Chinese—an increase of over200 per cent between 2008 and 2014. Furtheropportunies for students to develop their culturalcompetence and language abilies include:

• Immersion programs to experience China—The Victorian

Young Leaders to China Program (VYLC) provides valuablein-country learning opportunies for Year 9 students.

• Sister school partnerships—143 Victorian schools arepartnered with Chinese schools, which supports thecurriculum, language learning and acquision of skills forthe Asian Century.

• Internaonal Student Program—Over 4,100 Chinesestudents were enrolled in Victorian schools in July 2015.

• Six Victorian schools are currently delivering the Victorian

Cercate of Educaon in China in partnership with 19Chinese schools.

Building the skills of our current workforce

The Victorian Government believes helping our emerging

leaders to build their Asia literacy will create more

opportunies for meaningful and eecve long term

relaonships.

The Victorian Government will connue to support emerging

leaders in the private, public, not for prot, academic and

creave sectors through the Hamer Scholarships Program.

The Victorian Government has commied to improving the

Asia capabilies of the public service to ensure the prosperity

of our ocial relaons with Asia. As part of this commitment,

the Victorian and Jiangsu governments will foster public service

exchanges that enable emerging leaders to have an in-country

experience to develop Asia capabilies and language skills.

Direction two: Establish Victoria as Australia’s centreof excellence for Asia insights and capabilities

99

289

66K

4,107

2014

HAMERSCHOLARSHIPS

VYLC PROGRAMPARTICIPANTS

STUDENTSSTUDYINGCHINESE

CHINESEINTERNATIONALSTUDENTS

AUSTRALIACHINA BUSINESSCOUNCILRELOCATED

Victorians awarded a Hamer

Scholarship to study at

instuons in Jiangsu

Year 9 students and 45 teachers

have parcipated in the Victorian

Young Leaders to China program,

principally in Beijing and Shanghai

as well as in Jiangsu Province

Students studying Chinese in 2014—

over 52,000 students studied

Chinese in Victorian Government

schools and an addional 14,000students studied Chinese at 30

community language schools

2,361 Chinese internaonal students

were enrolled in Victorian

Government secondary schools and

1,746 in non government secondary

schools in July 2015

Australia China Business Council

relocated its naonal and stateoces to the Victorian

Government’s Internaonal

Chamber House


23/4023

Case studyBuilding Asia literacy

The Victorian Young Leaders to China Program

The Victorian Government’s Victorian Young Leaders to

China (VYLC) Program is helping to build students’ Asia

capabilies through an in-country Chinese language andculture experience.

Between March 2014 and December 2015, 397 students

from 57 secondary colleges across Victoria experienced

this life changing opportunity to live and aend school

in China. Over six weeks, students improved their

Chinese language prociency, leadership skills and

intercultural understanding. The accompanying 56

teachers also improved their professional pracce.

Over ve years, 1,500 students and 150 teachers will

parcipate in this program.

Learning Local Learning Global Network

The Learning Local Learning Global Network is a

network of Victorian schools that have sister school

partners in China. The Network uses industry exposure

to improve students’ China literacy. Three schools have

partnered with Murray Goulburn, a Gippsland-based

dairy company with a manufacturing facility in Qingdao,to build industry specic skills and China literacy for

young people aiming to work in the industry.

Long standing relaonship with the Ministry of

Educaon, China and with HANBAN

HANBAN is China’s naonal oce for teaching Chinese

as a foreign language and supports the learning and

teaching of Chinese in Victorian Government schools by

appoinng a Chinese Language Adviser, running the

Assistants to Teachers of Chinese program, and

establishing Confucius Classrooms and in-country

programs for students and teachers that are co funded

by the Victorian and Chinese governments.

Victoria will:• establish Victoria as Australia’s centre of excellence for

Asia insights and capabilies, and drive a coordinated

approach between government and the business and

educaon sectors that promotes innovaon and builds

knowledge and capabilies

• ensure more Victorians have an internaonal

experience as part of their studies by connuingsupport for the Victorian Young Leaders to China

Program, Hamer Scholarships, Sir John Monash

Scholarships, and the Commonwealth Government’s

New Colombo Plan iniave

• connue to emphasise Asia literacy in the school

curriculum, maintain the long standing relaonship

with HANBAN to strengthen the learning and teaching

of Chinese in Victorian schools, and support sister

school partnerships between Victorian and

Chinese schools

• improve the Asia capabilies of the public servicethrough language, culture and exchange opportunies,

including with Jiangsu.

Parcipant in the Victorian Young Leaders to China Program


24/4024

Taken literally, the Chinese word guanxi means

‘relaonships’. In pracce, the concept is much richer.

It emphasises the importance of personal relaonships

of mutual benet and, in China, these are central to

personal and business success.

Our goal is to foster genuine relaonships with China that

are strong, resilient and enduring. To do this, we must

develop trust, based on a deeper understanding of China—its people and culture, as well as its economic needs.

Strong trust between Victoria and China will provide a solid

foundaon for all of our future connecons.

Using culture to develop understanding

Cultural acvies—encompassing the arts, design and

sport—enable audiences to share interests, develop

connecons and enrich community engagement.

Sharing of Chinese cultural acvies deepens appreciaon

of culture at the community and individual levels.

Cultural exchanges can be high prole events, such as the

highly successful ‘Golden Age of China—Qianlong Emperor’exhibion at the Naonal Gallery of Victoria. But they can

also be community-level acvies, such as Chinese New

Year celebraons or sporng connecons. Between 2008

and 2012, 79 per cent of Victorian arts organisaons

engaged in cultural exchange acvies with Asia.

While developing Victoria’s new China Strategy, the

Government negoated a CulturalExchangeAgreement

with the Chinese Naonal Government, which will enable

the exchange of fesvals, exhibions, performances and

arst-in-residence opportunies.

Victoria looks forward to excing collaboraons and

exchanges that will take place under this agreement

between Chinese arsts, organisaons, cultural instuons

and governments. It will bring Chinese cultural acvies to

Victoria, boosng our creave and cultural industries and

our cultural connectedness.

Paving the way for new connections

Victoria has a large and long standing Chinese communityof over 254,000 people who have a wealth of language

skills, cultural knowledge and people-to-people connecons

on which the broader community could draw.

The Victorian Government will support Victoria’s Chinese

diaspora to develop outreach programs that will develop

the broader community’s understanding of Chinese culture

and people-to-people connecons in Victoria.

Building connecons between youths from both naons is

crucial to strengthening Victoria–China relaons for the

next generaon. The Government will support

opportunies for youths to develop their personalconnecons in order to share new ideas, foster

entrepreneurship and increase their cultural competence.

Direction three: Build connections throughreciprocal cultural partnerships and establish newplatforms for people-to-people engagement

Case studyThe Golden Age of China

Melbourne was the rst city outside China to host an

exhibion from the Palace Museum in Beijing’s

Forbidden City. The ‘Golden Age of China—Qianlong

Emperor’ exhibion at the Naonal Gallery of Victoria

(NGV) brought more than 120 historically and

culturally signicant Chinese objects to Melbourne.

The exhibion aracted 66,739 visitors, double

projected visitor numbers, reecng Victorians’

curiosity and desire to learn about China.

Victoria will:

• promote and develop new cultural collaboraonsthrough the major new agreement negoated

between the Victorian Government and the

Chinese Naonal Ministry of Culture

• connue to carry out cultural exchange iniaves

with Jiangsu and Sichuan provinces

• promote sports based collaboraon and exchange

with China

• promote knowledge sharing and people-to-people

connecons through Chinese community-led

cultural outreach programs

• establish a Chinese Film Fesval that showcases

the breadth of Chinese lm

• stage a major Asia Pacic performing and visual arts

fesval in Melbourne over the summer of 2017.

$1.0bnCULTURALTOURISM

Cultural tourism contribuon

to the Victorian economy


25/4025

Arst of the Australian Ballet Jessica Fyfe on tour in Beijing.Photo by Lisa Tomase.


26/4026

Victoria is a world-class locaon to invest in—with a stable

economy that is connuing to grow, a transparent business

environment, a triple-A credit rang, and the lowest

business tax rate of Australian states. And Victoria needs

and seeks investment—to create jobs, drive innovaon and

deliver public infrastructure at a compeve cost.

Chinese investment in Australia is booming, growing by over

2,700 per cent between 2004 and 2014. Changes to ForeignInvestment Review Board Screening processes, agreed

through the China–Australia Free Trade Agreement, mean

there is potenal for this growth to accelerate further.

The Victorian Government will make it a priority to

aract more of this investment to Victoria, assiduously

promong Victoria’s investment opportunies and making

our interface with foreign investors as easy to navigate

as possible.

What are we currently doing to attractChinese investment?

The Victorian Government has a dedicated investmentaracon agency (Invest Victoria) that can be accessed

directly or through any one of the Victorian Government’s

Business Oces in China. Invest Victoria provides a range

of condenal business facilitaon services to assist

businesses with market entry into Australia—including

market potenal evaluaon, business introducons, site

locaon services, guidance on government policy,

processes and approvals, and ongoing client support.

As well, the Victorian Government supports high net-wealth

individuals who wish to invest signicantly in Victoria and

sele here through:

• accelerated processing mes for visa nominaon

applicaons

• informaon about trade and investment opportunies

in Victoria

• contacts in the wealth management and nancial services

sector who can oer specialised assistance and advice on

complying investments.

What more can we do to attract investment?The China–Australia Free Trade Agreement will make

private Chinese investment in Australia simpler, by raising

investment-screening thresholds in non-sensive sectors

from $252 million to $1,094 million.

The Victorian Government will connue to improve the

promoon of Victoria as a high value and high return

investment desnaon for Chinese investors. Opportuniesinclude the Government’s infrastructure program—the

largest in Victoria’s history, with more than $17 billion to be

invested in road and public transport projects—and the

Renewable Energy Roadmap, which commits Victoria to

generang 20 per cent of its electricity from renewable

sources by 2020.

The Victorian Government is also leading an urban renewal

program which includes Fishermans Bend (Australia’s

largest urban renewal area), E-Gate and Arden Macaulay.

These projects represent signicant capital investment and

partnership opportunies.

Potenal Chinese investors in Victoria must navigate an

unfamiliar business environment. The Government will do

its part to ease their experience by further improving its

interface with potenal foreign investors, ensuring it is a

transparent and streamlined process.

The Government will connue to aract high net-worth

individuals to the State through a variety of support

services, including visa nominaon services.

Direction four: Attract investment, including intothe Government’s infrastructure pipeline, to support Victoria’s continued economic growth

Case Study

Infrastructure VictoriaThe Victorian Government has established

Infrastructure Victoria—an independent body that will

ensure Victoria’s immediate and long term

infrastructure needs are idened and priorised

based on objecve transparent analysis and evidence.

The body will release a 30 year infrastructure strategy

for Victoria and assess the Government’s priority

infrastructure projects and funding commitments

against the Government’s 5 year infrastructure plans.

Infrastructure Victoria will provide the public,

including potenal foreign investors, with certaintyaround the state’s infrastructure needs and the

Government’s commitment to meet them.


27/4027

The Victorian Government will :• promote the Government’s infrastructure pipeline

and connue to improve our China-specic

investment assistance services

• aract more private Chinese investors by providing

more informaon and support to potenal

investors on the new investment requirements for

investor and business migraon visas

• ensure seamless engagement with foreign

investors by beer coordinang and resourcing

investor services across government, under the

leadership of Invest Victoria.

$64.5bn

$4.54bn

95%

CHINESEINVESTMENT IN AUSTRALIA

INVESTMENTBY VICTORIAN-NOMINATEDMIGRANTS

SIV HOLDERS ARE CHINESE

Chinese investment in

Australia, making China

Australia’s 7th largest overall

investor, with 2.3% of total

foreign investment

Investment by 5,018 Victorian-

nominated investor and

business migrants, from 1 July2011 to 30 June 2015

95% of Signicant Investor

Visa holders in

Victoria are Chinese

Fishermans Bend

Urban Renewal Area

Outcomes: Victoria’s total share of Chinese investment to Australiato increase from 8 per cent to 20 per cent by 2026.

Victorian Government to attract and facilitate $2 billion ofChinese investment into the State, creating 3000 new jobs within the next ten years.

By 2026 Victoria aims tofacilitate $2 billion of Chineseinvestment into Victoria andto creating 3,000 jobs.

Since 2005, Victoriahas facilitated$1.2 billion Chinese

investment,creating 1,753 jobs.

2014

8%

2026

20%


28/4028

The Port of Melbourne


29/4029

The future is bright for Victorian exports to China

World’s leadingmerchandise traderChina is the world’s leading trader as measured

by the sum of exports and imports of goods.

15 cies with over10 million peopleChina has 15 cies with more than 10 million

people. Connuing urbanisaon may add 100

million more people to China’s cies by 2020.

75% of urbanconsumers to be middleclass by 2022By 2022, 75 per cent of China’s urban consumers

are forecast to earn a middle class income of

between 60,000 to 229,000 renminbi.

World’s largesteconomy by 2026China is forecast to overtake the

United States in nominal GDP by 2026.

US$1.9 trillion of goodsimports in 2014Although China is Australia’s leading

merchandise export desnaon, taking

33.9 per cent of its goods exports, this is just

5 per cent of China’s total goods imports

from all countries.

China will continue to drive demand across almost all V ictorian sectors

Key China–Australia Free Trade Agreement (ChAFTA) outcomes for Victoria

Most-Favoured Naon

(MFN) clause

Protects Australia’s compeve posion into the future, if China extends any more

benecial treatment to other trade partners in key sectors

Investment Liberalised screening for private Chinese investors in non-sensive sectors

Food and bre Phased eliminaon or reducon of taris on agricultural products and processed foods,

on par or beer access to China than any other FTA partner

Visitor economy Australian providers able to operate Australian-owned hotels and restaurants in China

Australian travel agencies/tour operators able to establish subsidiaries in China

Medical technology,

pharmaceucals and

healthcare

Tari reducons on many products, including pharmaceucals and health products

Australian providers able to establish wholly Australian-owned hospitals and aged care

instuons in China

Professional services Improved market access for professional services, including legal, telecommunicaons,

nancial, construcon, engineering, architectural and urban planning services

Victoria is well-posioned to capitalise on China’s

economic size (as the second largest economy by

nominal GDP) and demand for imports. Not only are

Victoria’s economic strengths aligned with China’s needs

(see gure 1.1 on page 15), but many of Victoria’s growth

sectors are set to receive new and signicantly improved

market access through the recently signed China–Australia

Free Trade Agreement.


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Victoria’s economy is transioning to a more diversied

industry base, bringing high value-added producon and a

stronger focus on services. To support economic growth

during this transion and into the future, many Victorian

businesses will need to focus internaonally—selling the

highest quality goods and services for which Victoria

is renowned.

Asia will undoubtedly connue to be our major consumer—the region is expected to produce half of the world’s total

economic output by 2025 and China will be a major driver

of this growth. Further, the historic China–Australia Free

Trade Agreement and the e-commerce boom (China’s

e-commerce sector recorded sales of more than half a

trillion Australian dollars in 2014, a 50 per cent increase on

the previous year) will provide unprecedented market

access for businesses.

But the Chinese market is compeve—China is the main

export partner of 43 countries globally, and of many other

sub-naonal jurisdicons, and is connuing to develop

trade agreements with more partners. And despite ourstrong relaonship, cultural and linguisc dierences can

pose a challenge for many businesses. It is therefore crical

to equip Victorian businesses with the skills they need to

successfully do business in the region and to seize

specic opportunies.

What are we currently doing?The Government is already helping Victorian businesses

to address these challenges:

• The Government hosts a large number of inbound and

outbound trade missions, which are targeted to drive

growth in priority sectors and regions, including our

largest mul-sector inbound trade mission, the Victorian

Invitaon Program.

• Skills and training programs for businesses are available

including the Export Skills and Brieng program and the

Access Program.

• The Government is working with federal agencies to

address behind the border barriers aecng internaonal

market access for Victorian goods and services.

• Business matching in China and at home connect

Victorian exporters with potenal partners, including

e-commerce plaorms, and the Government contributed

to Austrade’s E-commerceinChina:aguidefor

Australianbusinesses.

Other iniaves canvassed elsewhere in this document will

also assist businesses to obtain greater market access.

These iniaves include the Premier and his Ministers

comming to travel to China every year and at least once

in this term of government respecvely, and strengthening

our sub-naonal relaonships in Jiangsu and Sichuan.

Addionally, building the linguisc and cultural competence

of Victorian youth and professionals will ensure a pipeline

of Asia capable workers for our businesses in the future.

Direction five: Supporting successfulbusiness engagement with China

9% AUSTRALIANBUSINESSESOPERATING IN ASIA

Percentage of Australianbusinesses currently operang

in Asia, despite the enormity

of opportunies in the region

65%NO INTENTION OFCHANGING STANCE ONOPERATING IN ASIA

Percentage of Australian

businesses that have no

intenon of changing their

stance on operang in Asia in

the next 2–3 years


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Enhancing Government support

Understanding the e-commerce boom in China

The Victorian Government is commied to providing

businesses with up-to-date informaon on navigang the

Chinese e-commerce environment, connecng Victorian

exporters to e-commerce plaorms and working with those

plaorms to promote Victorian goods and services online.

The Government will also seek to leverage its logiscal

strengths to aract the physical infrastructure ofe-commerce plaorms to Victoria.

Connecting regional Victoria

Providing addional support to connect regional Victoria to

China is also important. The Victorian Government will

build on the Victoria–Jiangsu Regional City Alliance,

established by the two governments in 2014. Both

jurisdicons have commied to its implementaon, which

will see mutually benecial economic development in areas

of growth and compeve advantage; regular, ongoing

economic and trade dialogue between cies; and a

plaorm for increased exchanges and acvies. There will

also be a strong Regional City Alliance component to trademissions, ensuring our regions are well-represented.

Victoria will:• support small and medium sized business to

develop the know-how to idenfy and take up

export opportunies in China, including those

oered by ChAFTA and new trends such as

e-commerce

• connually improve the outcomes of core business

acvies including the conduct of highly targetedin and outbound missions (including the large

mul-sector Victorian Invitaon Program) and

working with the Commonwealth Government to

address behind the border barriers in-market

• aract Chinese e-commerce plaorms to Victoria

by leveraging our logiscal strengths and

reputaon for high quality goods and services

• beer connect regional Victoria to potenal

partners in China through the Regional City

Alliance with Jiangsu Province.


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Promong Victorian products in-market:Fruitday.com e-commerce markeng promoon


33/4033

150K 70%

¥10tr 25%

NEW CHINESESHOPPERSPER DAY

OF ONLINESALES

E-COMMERCESECTOR

ANNUALGROWTH RATE

An esmated 150,000 new

Chinese shoppers use

e-commerce every single

day of the week.

Business to consumer

transacons account for

more than half of all online

sales and is expected to

grow to 70% by 2020.

Total value of e-commerce

sector is esmated to be

RMB 10 trillion by 2020

Online sales in China

connue to boom and will

grow at an annual rate of

25 per cent

E-commerce: An exciting opportunityfor Victorian businesses

Victorian businesses can now directly reach China’s

online customers through a variety of e-commerce

plaorms—online malls, hypermarkets and specialty

markets, ash sales and standalone e-commerce

websites. The Chinese Government recently developedpilot cross-border e-commerce zones in seven cies—

making more authenc foreign goods available to

Chinese consumers at a lower cost and with faster

clearance and dispatch mes.

Engaging a third party Australia-based buying agent

who represents Chinese distributors and online

marketplaces can be a low risk, convenient and ecient

way for small and medium businesses to reach Chinese

consumers. The agent takes ownership of the product,

including customs procedures and distribuon,

simplifying what was historically a lengthy, costly and

complicated process. Some agents also oer tailoredpromoonal and markeng assistance to drive

more sales.

Major Chinese e-commerce marketplaces are also

seeking to establish warehousing and oce facilies in

Australia and partner with Australian suppliers and

logiscs companies. This trend will beer connect

Australian products with their Chinese consumers,

and provide great potenal for more jobs in Victoria.

Boosng theVictorian economyJD.com and Alibaba have both launched global extensions

of their e-commerce plaorms—these enable Victorian

businesses to sell their products directly to Chinese

consumers, overcoming a number of market entry barriers.

JD.com recently partnered with Treasury Wine Estates tooer the company’s wines to its more than 100 million

acve customers. In September 2015, Chemist Warehouse,

following its recent partnership with Alibaba, announced it

will establish a new enty in Victoria to support the

e-commerce arm of its business. Chemist Warehouse has

projected sales of $22 million in the rst year and

$68 million in the second year, and it ancipates 50 new

jobs will be created in Melbourne to service this forecasted

rise in sales.

Promong Victorianproducts in-marketThe Victorian Government partnered with Citrus Australia

and Chinese e-commerce provider, fruitday.com, to acvely

promote Victorian produce in China. The partnership with

fruitday.com contributed to sales of over $1 million in

oranges to Chinese consumers during a one-week

promoon, signicantly contribung to the success of the

Now! In Season campaign. This campaign was awarded an Asia

Fruit Award for best horculture markeng campaign in 2015.

E-commerce: An exciting opportunity for Victorianbusinesses


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Direction six: Target trade activity accordingto Victoria’s competitive strengths and specificmarket opportunities in China

Victoria’s exports to China have been extraordinarily

successful over the past decade, growing by 44 per cent

over the past ve years alone. The Victorian Government

aims to grow our exports to China by building on our main

industry and trade policies with a suite of Asia- and China-

specic acons.

Cross-sector initiativesThe Government’s new China Strategy establishes three main

cross-sector iniaves that address specic gaps in our trade

relaonship with China. The following iniaves—described

in more detail under Direcons 1 and 2—will help our

businesses engage with and grow their exports to China:

• The Victoria–Jiangsu InnovatonandTechnology

Agreement will fund joint projects between Victorian and

Jiangsu organisaons to commercialise innovaons.

• The Victoria–Sichuan liveability iniave will support

commercial outcomes for businesses in liveability sectors,

by promong them as a branded package of exports that

address many of China’s urbanisaon challenges.

• Posioning Victoria as the centre of Asia capabilies and

insights will drive the capability of the business and

educaon sectors to engage with and be successful in

Asian markets, by coordinang and extending exisng

programs that connect aspiring exporters to experts.

Priority export markets in ChinaCentral to the Government’s industry and trade policies are

the six sectors idened in our BacktoWork strategy that

will dene the future of our state and be major exporters to

China. These sectors have the potenal for extraordinary

growth and the capacity to create high skill, high wage jobs:

• food and bre

• internaonal educaon

• medical technology and pharmaceucals

• professional services

• transport, defence and construcon technology

• new energy technology.

There are two other major Victorian sectors whose exports

to China have extraordinary potenal:

• visitor economy

• creave industries.

The Victorian Government is developing new policy

direcons for these eight sectors, to drive their

development, growth and exports.

The Victorian Government will support businesses to

grow their exports to China through its broader

industry sector approaches by:

• developing strategies for the sixBacktoWork

sectors that best support the growth of each

sector, to be supported by the $200 million Future

Industries Fund

• refreshing Victoria’s approach to the visitor

economy by forming a new enty, Visit Victoria,

which combines the Tourism Victoria and the

Victorian Major Events Company

• developing a creave industries strategy to

strengthen our creave and cultural industries

• applying a more targeted approach to trade

missions—both to and from China—that reects

Victoria’s compeve strengths and new

opportunies arising from the China–Australia

Free Trade Agreement, such as professionalservices and the creave industries.

Case StudySports Diplomacy

Victorians’ passion for sport is evident in our extensive

calendar of world-class major events—including the

Australian Open, Victorian Spring Racing Carnival and

the Melbourne Formula One Grand Prix—that

disnguish Victoria as the naon’s ‘sporng capital’.

Chinese parcipaon in Victoria’s sporng events, such

as Li Na’s win at the Australian Open in 2014, aracts

signicant numbers of visitors whose me here boosts

our visitor economy and builds our cultural knowledge.

Programs such as Melbourne United’s basketball

program—which is touring a team to China each year,

and is seeking to recruit Chinese players—builds trust

through long term partnerships, and fosters cultural

understanding in the broader community.


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Food and fibre

Agriculture accounts for 48 per cent of

Victoria’s total goods exports and China

is Victoria’s biggest export market for

food and bre products—equal to our

top ve markets combined. Victoria’s

reputaon for safe and clean produce

is exceponal, and demand for our

premium food and beverages connues

to grow.

The Victorian Government helps

businesses capture new opportunies

in China, tailor their products for Asian

consumers and navigate behind the

border barriers, including quaranne.

Support will connue for businesses to

beer understand Asian consumer

tastes and preferences, including

through the Centre for AgriBioscience.

The Government’s Food Source Victoriaprovides grants to support food

producers and businesses to work

together to grow exports and create

new jobs. Hosng Chinese trade

delegaons and making the sector

export ready will encourage Chinese

investment to drive business growth

and ease capacity constraints.

International education

Educang internaonal students in

Victoria is the State’s largest services

export, one third of whom come from

China. Ad

Victoria's new China Strategy - Partnerships for Prosperity

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